test bank for public finance 10th edition by harvey rosen
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name:Test bank for Public Finance 10th Edition by Harvey Rosen Edition:10th Edition author:by Harvey Rosen, Ted Gayer ISBN:ISBN-13: 9780078021688 ISBN-10: 0078021685 type:Test bank format:word/zip All chapter include Full download link:https://bit.ly/3mupUeUTRANSCRIPT
Test bank for Public Finance 10th Edition by Harvey Rosen
Full download link:https://bit.ly/3mupUeU
Chapter 01
Introduction
Multiple Choice Questions
1. Public finance
A. is not like public economics.
B. develops principles for understanding the economic role of government.C. only works for local and state governments.D. all of these answer options are correct.
1-1Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
2. A regulatory budget would
A. provide an accounting of government regulation.B. be difficult to compute.C. have to be attempted
unofficially.D. all of these answer options are correct.
3. The federal government
A. is the largest taxing entity in the country.
B. is only concerned with international issues.
C. spends heavily on net interest.
D. all of these answer options are correct. 4. State and local governments receive the largest amount of revenue from
A. personal income taxes.
B. property taxes.
C. sales taxes.
D. payroll taxes.
5. The federal government gets most of its revenue from
A. personal income taxes.
B. property taxes.
C. sales taxes.
D. payroll taxes.
1-2Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
6. In a pure market economy,
A. there is no role for government.B. government intervention might be
needed.C. large markets where people meet to buy and sell are
required.D. all of these answer options are correct.
7. A government good or service includes
A. bridges.
B. parks.
C. national defense.
D. all of these answer options are correct. 8. Government output is hard to account for because government
A. is so large.
B. provides goods that have no resale value.C. keeps secrets about what it produces.D. goods are generally not sold or produced in easily measurable
units. 9. Economists who study the role of government in the market
A. agree mostly on the role that the government should play.
B. study for market problems that the government might help solve.
C. find that supply and demand graphs never work for the government.D. none of these answer options are correct.
10. Economics
A. started as a business application.B. can never be defined.C. is the study of unlimited wants but limited
resources.D. has no "real world" relevance.
1-3Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
11. Taxes
A. are mandatory payments.
B. are necessary for financing government expenditures.C. do not directly relate to the benefit of government goods and services received.D. all of these answer options are correct.
12. Education is
A. generally financed at the state and local level.
B. too expensive for the federal government.C. generally financed at the federal
level.D. financed on a voluntary basis.
13. Politics
A. play no role in public finance.
B. influence government decisions.
C. have to be factored into economic decision making.D. all of these answer options are correct.
14. Individuals
A. are too small to matter in macroeconomic decision making.
B. need to participate in a democracy.
C. make up the government.
D. are too small to matter in macroeconomic decision making and need to participate in a democracy.
E. need to participate in a democracy and make up the government. 15. The unified budget is
A. a budget that includes all nations.B. a document which itemizes all the federal government's expenditures and
revenues.C. a document that accounts for all spending by states.D. none of these answer options are correct.
1-4Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
16. In 2012 the federal budget was almost
A. 1 million pages long.
B. 17 pages long.C. 1,300 pages long.D. 500 pages long.
17. Social insurance has become an increasingly large portion of federal taxes because of
the "Baby Boomer" generation.
A. TrueB. FalseC. Uncertain
18. A very small portion of government expenditures is financed by taxes.
A. TrueB. FalseC. Uncertain
19. In 2011 national defense was just as large a general expenditure as Social Security.
A. TrueB. FalseC. Uncertain
20. The Constitution of the United States says nothing about state economic activity.
A. TrueB. FalseC. Uncertain
21. The taxes paid by citizens are directly related to the benefit of government goods
and services received.
A. TrueB. FalseC. Uncertain
1-5Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
22. Interest on the national debt, as a percentage of federal expenditures, has increased significantly since 1965.
A. TrueB. FalseC. Uncertain
23. Local governments rely heavily on property taxes.
A. TrueB. FalseC. Uncertain
24. Government is designed to handle problems not addressed by the private sector.
A. TrueB. FalseC. Uncertain
25. Expenditures, as a percentage of GDP for the United States, are not very different
than those of other industrialized nations.
A. TrueB. FalseC. Uncertain
26. Payroll taxes are a major financing tool at the federal level.
A. TrueB. FalseC. Uncertain
27. In 2011 the federal government spent 345.8 billion dollars on income security.
A. TrueB. FalseC. Uncertain
28. Personal income and Social Security payroll taxes are currently the largest sources of
government revenue.
A. TrueB. FalseC. Uncertain
1-6Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
Essay Questions
29. Write an essay discussing some of the reasons that federal expenditures for Social Security have increased since 1965.
30. Do you think it is correct policy that the federal government is not required to finance
all of its expenditures with tax revenues and is allowed to borrow? What are the implications of this policy?
31. Why do/should we care that federal expenditures are becoming an increasingly larger
portion of GDP?
1-7Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
32. Discuss your views on government intervention regarding tobacco consumption.
1-8Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
Chapter 01 Introduction Answer Key
Multiple Choice Questions
1. Public finance
A. is not like public economics.
B. develops principles for understanding the economic role of government.C. only works for local and state governments.D. all of these answer options are correct.
AACSB: Reflective Thinking
Accessibility: Keyboard NavigationBlooms: Remember
Difficulty: 1 EasyTopic: Introduction
2. A regulatory budget would
A. provide an accounting of government regulation.B. be difficult to compute.C. have to be attempted
unofficially.D. all of these answer options are correct.
AACSB: Reflective Thinking
Accessibility: Keyboard NavigationBlooms: Remember
Difficulty: 1 EasyTopic: Government at a Glance
3. The federal government
A. is the largest taxing entity in the country.
B. is only concerned with international issues.
C. spends heavily on net interest.
D. all of these answer options are correct.
AACSB: Reflective ThinkingAccessibility: Keyboard Navigation
Blooms: RememberDifficulty: 1 Easy
Topic: Government at a Glance
1-9Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
4. State and local governments receive the largest amount of revenue from
A. personal income taxes.
B. property taxes.
C. sales taxes.
D. payroll taxes.
AACSB: Reflective Thinking
Accessibility: Keyboard NavigationBlooms: Remember
Difficulty: 1 EasyTopic: Government at a Glance
5. The federal government gets most of its revenue from
A. personal income taxes.
B. property taxes.
C. sales taxes.
D. payroll taxes.
AACSB: Reflective Thinking
Accessibility: Keyboard NavigationBlooms: Remember
Difficulty: 1 EasyTopic: Government at a Glance
6. In a pure market economy,
A. there is no role for government.B. government intervention might be
needed.C. large markets where people meet to buy and sell are
required.D. all of these answer options are correct.
AACSB: Reflective Thinking
Accessibility: Keyboard NavigationBlooms: Remember
Difficulty: 1 EasyTopic: Public Finance and Ideology
1-10Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
7. A government good or service includes
A. bridges.
B. parks.
C. national defense.
D. all of these answer options are correct.
AACSB: Reflective ThinkingAccessibility: Keyboard Navigation
Blooms: UnderstandDifficulty: 1 Easy
Topic: Public Finance and Ideology
8. Government output is hard to account for because government
A. is so large.
B. provides goods that have no resale value.C. keeps secrets about what it produces.D. goods are generally not sold or produced in easily measurable
units.
AACSB: Reflective ThinkingAccessibility: Keyboard Navigation
Blooms: UnderstandDifficulty: 2 Medium
Topic: Government at a Glance
9. Economists who study the role of government in the market
A. agree mostly on the role that the government should play.
B. study for market problems that the government might help solve.
C. find that supply and demand graphs never work for the government.D. none of these answer options are correct.
AACSB: Reflective Thinking
Accessibility: Keyboard NavigationBlooms: UnderstandDifficulty: 2 Medium
Topic: Public Finance and Ideology
1-11Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
10. Economics
A. started as a business application.B. can never be defined.C. is the study of unlimited wants but limited
resources.D. has no "real world"
relevance.
AACSB: Reflective ThinkingAccessibility: Keyboard Navigation
Blooms: RememberDifficulty: 1 Easy
Topic: Public Finance and Ideology
11. Taxes
A. are mandatory payments.
B. are necessary for financing government expenditures.C. do not directly relate to the benefit of government goods and services received.D. all of these answer options are correct.
AACSB: Reflective Thinking
Accessibility: Keyboard NavigationBlooms: Remember
Difficulty: 1 EasyTopic: Public Finance and Ideology
12. Education is
A. generally financed at the state and local level.
B. too expensive for the federal government.C. generally financed at the federal
level.D. financed on a voluntary basis.
AACSB: Reflective Thinking
Accessibility: Keyboard NavigationBlooms: Remember
Difficulty: 1 EasyTopic: Government at a Glance
1-12Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
13. Politics
A. play no role in public finance.
B. influence government decisions.
C. have to be factored into economic decision making.D. all of these answer options are correct.
AACSB: Reflective Thinking
Accessibility: Keyboard NavigationBlooms: Remember
Difficulty: 1 EasyTopic: Government at a Glance
14. Individuals
A. are too small to matter in macroeconomic decision making.
B. need to participate in a democracy.
C. make up the government.
D. are too small to matter in macroeconomic decision making and need to participate in a democracy.
E. need to participate in a democracy and make up the government.
AACSB: Reflective ThinkingAccessibility: Keyboard Navigation
Blooms: UnderstandDifficulty: 2 Medium
Topic: Public Finance and Ideology
15. The unified budget is
A. a budget that includes all nations.B. a document which itemizes all the federal government's expenditures and
revenues.C. a document that accounts for all spending by states.D. none of these answer options are correct.
AACSB: Reflective Thinking
Accessibility: Keyboard NavigationBlooms: Remember
Difficulty: 1 EasyTopic: Government at a Glance
1-13Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
16. In 2012 the federal budget was almost
A. 1 million pages long.
B. 17 pages long.C. 1,300 pages long.D. 500 pages long.
AACSB: Reflective Thinking
Accessibility: Keyboard NavigationBlooms: Remember
Difficulty: 1 EasyTopic: Government at a Glance
17. Social insurance has become an increasingly large portion of federal taxes because of the "Baby Boomer" generation.
A. TrueB. FalseC. Uncertain
AACSB: Reflective Thinking
Accessibility: Keyboard NavigationBlooms: Remember
Difficulty: 1 EasyTopic: Government at a Glance
18. A very small portion of government expenditures is financed by taxes.
A. TrueB. FalseC. Uncertain
AACSB: Reflective Thinking
Accessibility: Keyboard NavigationBlooms: Remember
Difficulty: 1 EasyTopic: Government at a Glance
19. In 2011 national defense was just as large a general expenditure as Social Security.
A. TrueB. FalseC. Uncertain
AACSB: Reflective Thinking
Accessibility: Keyboard NavigationBlooms: Remember
Difficulty: 1 EasyTopic: Government at a Glance
1-14Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
20. The Constitution of the United States says nothing about state economic activity.
A. TrueB. FalseC. Uncertain
AACSB: Reflective Thinking
Accessibility: Keyboard NavigationBlooms: Remember
Difficulty: 1 EasyTopic: Government at a Glance
21. The taxes paid by citizens are directly related to the benefit of government goods and services received.
A. TrueB. FalseC. Uncertain
AACSB: Reflective Thinking
Accessibility: Keyboard NavigationBlooms: Remember
Difficulty: 1 EasyTopic: Government at a Glance
22. Interest on the national debt, as a percentage of federal expenditures, has increased significantly since 1965.
A. TrueB. FalseC. Uncertain
AACSB: Reflective Thinking
Accessibility: Keyboard NavigationBlooms: Remember
Difficulty: 1 EasyTopic: Government at a Glance
23. Local governments rely heavily on property taxes.
A. TrueB. FalseC. Uncertain
AACSB: Reflective Thinking
Accessibility: Keyboard NavigationBlooms: Remember
Difficulty: 1 EasyTopic: Government at a Glance
1-15Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
24. Government is designed to handle problems not addressed by the private sector.
A. TrueB. FalseC. Uncertain
AACSB: Reflective Thinking
Accessibility: Keyboard NavigationBlooms: Remember
Difficulty: 1 EasyTopic: Government at a Glance
25. Expenditures, as a percentage of GDP for the United States, are not very different than those of other industrialized nations.
A. TrueB. FalseC. Uncertain
AACSB: Reflective Thinking
Accessibility: Keyboard NavigationBlooms: Remember
Difficulty: 1 EasyTopic: Government at a Glance
26. Payroll taxes are a major financing tool at the federal level.
A. TrueB. FalseC. Uncertain
AACSB: Reflective Thinking
Accessibility: Keyboard NavigationBlooms: Remember
Difficulty: 1 EasyTopic: Government at a Glance
27. In 2011 the federal government spent 345.8 billion dollars on income security.
A. TrueB. FalseC. Uncertain
AACSB: Reflective Thinking
Accessibility: Keyboard NavigationBlooms: Remember
Difficulty: 1 EasyTopic: Government at a Glance
1-16Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
28. Personal income and Social Security payroll taxes are currently the largest sources of government revenue.
A. TrueB. FalseC. Uncertain
AACSB: Reflective Thinking
Accessibility: Keyboard NavigationBlooms: Remember
Difficulty: 1 EasyTopic: Government at a Glance
Essay Questions
29. Write an essay discussing some of the reasons that federal expenditures for Social Security have increased since 1965.
Federal expenditures for Social Security have increased since 1965 for several reasons, including increases in the number of persons entitled to benefits and the introduction of Medicare and other programs.
AACSB: Reflective Thinking
Blooms: UnderstandDifficulty: 2 Medium
Topic: Government at a Glance
30. Do you think it is correct policy that the federal government is not required to finance all of its expenditures with tax revenues and is allowed to borrow? What are the implications of this policy?
Answers will vary, but financing out of current spending ensures that there are no deficits at the end of the fiscal year. However, in times of crisis, such as war, this type of financing would limit the government's ability to accomplish its stated goals.
AACSB: Analytic
Blooms: EvaluateDifficulty: 3 Hard
Topic: Government at a Glance
1-17Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
31. Why do/should we care that federal expenditures are becoming an increasingly larger portion of GDP?
We should care that federal expenditures are becoming an increasingly larger portion of GDP because of public sector crowding out.
AACSB: AnalyticBlooms: AnalyzeDifficulty: 3 Hard
Topic: Government at a Glance
32. Discuss your views on government intervention regarding tobacco consumption.
As with many social issues, tobacco consumption will not only impact the health of the population but the ability of people to work and be productive members of society. Some will argue that this is a private issue and the government has no role in regulating people treat their own bodies but others will counter that the impacts are not just to the consumer but to third parties also.
AACSB: AnalyticBlooms: AnalyzeDifficulty: 3 Hard
Topic: Government at a Glance
1-18Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.